Shares of United Microelectronics Corporation (NYSE:UMC) dropped 10.7% on Wednesday after the Taiwanese chip foundry reported fourth-quarter earnings that came in below expectations, even as revenue modestly exceeded forecasts.
UMC posted fourth-quarter earnings of $0.13 per ADS, missing the consensus estimate of $0.14. Revenue for the period reached $1.97 billion, slightly ahead of analyst expectations of $1.94 billion.
Sales rose 4.5% from the previous quarter and increased 2.4% year on year, while the company’s utilization rate held steady at 78%.
Profitability improved sequentially, with fourth-quarter gross margin rising to 30.7% from 29.8% in the third quarter. Advanced 22/28nm technologies accounted for 36% of total wafer revenue, with 22nm revenue jumping 31% quarter over quarter to a record level and representing more than 13% of overall fourth-quarter sales.
“In the fourth quarter, our results were in line with guidance, with flattish wafer shipments amid mild demand across most markets,” said Jason Wang, co-president of UMC.
“The 4.5% revenue increase during the quarter was supported by favorable foreign exchange movement as well as sequential growth in our 22/28nm business, which continues to improve our product mix.”
Looking ahead, UMC said it expects wafer shipments in the first quarter of 2026 to remain flat, with average selling prices in U.S. dollars staying firm. The company anticipates gross margins to sit in the high-20% range, while capacity utilization is expected to be in the mid-70% range. Capital expenditure for 2026 has been set at $1.5 billion, down slightly from $1.6 billion in 2025.
For the full year 2025, UMC reported earnings per share of NT$3.34 ($0.53), with annual revenue rising 2.3% to NT$237.55 billion ($7.57 billion). Revenue from 22nm products surged 93% year on year, reaching a record high in the fourth quarter.
Wang added, “UMC is confident that 2026 will be another growth year as tape-outs on our 22nm platforms accelerate and other new solutions continue to gain business traction.”